Ridley feels the heat on salts

Ridley
’s
John Murray
is feeling the heat. A savage 11 per cent slump in the salt and animal feed producer’s share price yesterday has placed added pressure on plans to sell the Cheetham salt business.

Rogers wants more detail by August, when Ridley delivers its full-year results. Sources suggest Ridley’s board has signed off on a sale and information memorandums will be sent out as early as next month.

Trading houses are expected to be targeted, such as Sumitomo, Mitsubishi, Mitsui, Marubeni, Sojitz and Wilmar. CK Life Sciences was also keen but its interest has waned.

It is worth questioning why Ridley would sell the salt operations, which have a $240 million book value, when its usually stable performance has taken a hit due to a spike in costs generated by last year’s floods.

The sale has been triggered by major shareholder Guinness Peat Group looking to extract as much value as possible as it looks to exit its investments. Selling Cheetham puts Ridley’s agriproducts in a better takeover position.